Hyperlawhypertext legal database Newcombe v. Chicago & Northwestern Railway Co. 28 N.Y. St. Rep. 716

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Newcombe v. Chicago & Northwestern Railway Co.

28 N.Y. St. Rep. 716 Court N.Y. Gen. Term Decision date 1890-01-10 English

Delivered by Brady, J.

Contents

Majority

p. 716
Isaac B. Newcombe et al., Resp’ts, v. The Chicago & Northwestern Railway Co. et al., App’lts.
(Supreme Court, General Term, First Department,
Filed January 10, 1890.)

Headnote

1. Pleading—J cinder of causes of action.
While different claims may not he united in a single cause of action by stating them together instead of separately, it is well established that
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where the facts alleged are all parts of one continuing act creating a single cause of action they may he united.
3. Same—Pakties.
One H. pledged certain negotiable securities to plaintiff and thereafter became insolvent. Defendants published a notice declaring that the same had been tortiously abstracted by Hill from an estate of which they were executors, and the defendant company refused to register the securities. In an action to prevent such interference, and to adjudge plaintiff the owner of the securities, Held, that H. was a necessary party.
3, Same.
In such action a joinder of causes of action against the defendants for their acts individually and also as executors, is improper.
Appeal from judgment overruling demurrer to the complaint.
The allegations of the complaint, necessarily admitted by the demurrer, establish the following facts:
The plaintiffs, Messrs. I. B. Newcombe & Co., are stock-brokers, doing business in the city of New 'York, and as such brokers, in the usual course of business, in June, 1887, made cash advances to a large amount to one Jerome L. Hill, upon the pledge by him to them of certain negotiable securities, then in his actual possession and apparent ownership, among which were fifty bonds of the Chicago & Northwestern Bailway Company, known as “five per cent., twenty-five years debentures of 1909,” of $1,000 each.
These bonds were all coupon bonds, payable to bearer, and passing by delivery in the market from hand to hand.
They were pledged as security for any and all indebtedness which should be created or exist from Hill, the pledgee, to plaintiffs’ firm.
After such pledge, and prior to July 1,1887, Hill, the pledgor, became indebted to plaintiffs’ firm in the sum of $52,517.38 ; plaintiffs thereupon sold certain of the securities so pledged by him, including three of the said debenture bonds, and applied the proceeds of sale on account of his debt. Plaintiffs continued to hold the remaining forty-seven debenture bonds, and, after applying the proceeds of sale of the other securities, there remained due and owing to them from Hill the sum of $48,338.35, and interest from August 8, 1887.
In July, 1887, Hill became, and has ever since been, wholly insolvent.
The plaintiffs took the said debenture bonds in the usual course of business, "in good faith, before maturity, and without any knowledge or notice of any interest or title, or claim of interest or title in respect to them by or on behalf of any person or persons other than Hill, or that he was not the sole owner of all said bonds and entitled to sell or pledge or otherwise dispose of them.
Late in July, 1887, or early in August, 1887, the defendants, Bloodgood and Lottimer, published notices in newspapers in the city of New York and delivered notices to the New York Stock Exchange, and to the defendant, the Chicago & Northwestern Bailway Company, claiming that the said bonds had been tortiously and wrongfully abstracted from the estate of William Lot-timer, deceased, by Hill, who was, with them, one of the execu.
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tors of the will of said Lottimer, and that they as executors Were the lawful owners of the bonds.
On August 4, 1887, the defendants, Bloodgood and Lottimer, •, as executors, commenced an action of replevin against Messrs. I. B. Newcombe & Co., the plaintiffs herein, who appeared by attorneys, and demanded a copy of the complaint August 22, 1887.
Bloodgood and Lottimer, under various pretexts, obtained extensions of time to serve their complaint until November 17,1887.
I. B. Newcombe & Co., within eleven days thereafter (on November 28, 1887), answered the complaint in the replevin suit, denying the claim of the plaintiffs therein and alleging their lawful title to the bonds.
The replevin suit being thus at issue, November 28, 1887, Messrs. I. B. Newcombe & Co. applied to the court to set it down for trial as a preferred cause, the sole plaintiffs being executors, and it was set down for trial for December 15, 1887.
The executors by various pretences and excuses succeeded in postponing the trial from time to time, although I. B. Newcombe & Co. were ready with their witnesses, until March 19, 1888, when they professed to be ready for trial, but on the next day when the case was called they made default and judgment of dismissal and for costs was entered against them.
In the meantime plaintiffs presented the coupons maturing November 1, 1887, to the defendant, the Chicago & Northwestern Eailway Company, for payment, which was refused on the sole-ground of the notice and claim of the Lottimer executors.
On March 21, 1887, after the executors’ replevin suit had been dismissed, plaintiffs demanded of the Chicago & Northwestern Eailway Company to register the bonds in their name pursuant to the contract provision for registry contained in the bonds, offering to surrender the coupon bonds and the coupons yet to mature, this being the right of plaintiffs as the holders of the bonds, according to their terms. The railway company wrongfully refused this demand, again on the sole ground of the notice and claim, of • the Lottimer executors.
The above acts and proceedings of Bloodgood and Lottimer were not in good faith, but were wrongful and solely for the purpose of creating doubt as to plaintiffs’ title, and to deprive the plaintiffs of the beneficial use of their property; and the defendants have prevented plaintiffs from availing of the bonds in their business, or selling them and applying the proceeds on the debt of TTill or dealing with them in any way.
The complaint prays relief that the plaintiffs’ title to the bonds may be adjudged; that the defendant railway company may be required to register the bonds in the name of plaintiffs; that Bloodgood and Lottimer, individually and as executors of Lottimer, may be adjudged to have no right or title to the bonds as against plaintiffs and for an injunction and damages, with costs.
The defendants Bloodgood and Lottimer demurred as individuals and as executors by several demurrers, individually, that there was a defect of parties in the omission of Jerome L. Hill;
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second, that the alleged causes of action have been ¡improperly united, to wit:
An alleged cause of action for the recovery from the defendant Chicago & Northwestern Railway Company of-the amount of the coupons maturing November 1,1887, on the forty-seven debenture bonds of said company described in the complaint.
An alleged cause of action to compel the issue by the defendant Chicago & Northwestern Railroad Company to the plaintiffs of registered bonds for the said debenture bonds.
An alleged cause of action for damages for an alleged wrongful refusal to make such issue.
An alleged cause of action against these defendants for damages for alleged unfounded claims of title to said debenture bonds and coupons.
An alleged cause of action against these defendants as executors of the last will and testament of William Lottimer, deceased, for damages for alleged unfounded claims of title to said debenture bonds and coupons.
And that the complaint does not state facts sufficient to constitute a cause of action.
And they demurred as executors that there was a defect of parties in the omission of Jerome L. Hill; second, that alleged causes of action had been improperly united and which are stated in the same form as in the previous demurrer; and that the complaint did not state facts sufficient to constitute a cause of action.
James Thomson, for app’lts; Butler, Stillman & Hubbard, for resp’ts.

The arguments of the respective counsel in this-case took a wide range and embraced a great many propositions, consideration of all of which is entirely unnecessary for the disposition of the controlling questions involved herein.

The conclusions arrived at upon a consideration of the whole case it may be necessary to state, for the reason that upon two points urged by the appellants the judgment seems to be erroneous and must be reversed.

The plaintiffs, as pledgees of the several bonds set out in the complaint, having become so in good faith and for full value, were entitled to all the advantages springing from the possession of the bonds, and had a right to enforce them in this action, and in the attempt to do so should not have been interfered with by the defendants Lottimer & Bloodgood, either individually or as executors, further than to pay the amount of the plaintiffs’ indebtedness and thus entitle themselves to the possession of the bonds. There does not seem to be any room to question the right of the plaintiffs to all the advantages suggested under the settled rules of this state, and that such a transfer as was made to them passed the entire title, legal and equitable, in the bonds. See McNeil v. Tenth Nat. Bank, 46 N. Y., 331 , a case in which the subject was fully discussed and the rules clearly stated.

The contention that the defendants Lottimer & Bloodgood were improperly joined with respect to the averments concerning their

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interference with the plaintiffs’ rights cannot be sustained, for the reason that it was through their mischievous interference as alleged in the complaint the defendant, the railroad company,, refused to recognize the plaintiffs’ rights, and by the assertion of a title in themselves which it was necessary to dispose of in order to enable the railroad company to perform what they were re■quired to do under the conditions and provisions of the bonds. The union of these defendants was germane to the subject matter and perfectly consistent. By such a union the plaintiffs, assuming that the cause of action existed, would secure the judgment of the court affecting all the parties in reference to the title to the bonds and dispose of the controversy raised by the attack of the ■defendants Lottimer and Bloodgood in reference to it whether as ■executors or otherwise. The object of the plaintiffs was to obtain the advantages derived from the possession of the bonds, which was prevented only by the conduct of the defendants Lottimer -and Bloodgood whose attitude was antagonistic and caused the delay.

While different claims may not be united in a single cause of •action by stating them together instead of separately, it is well established that where the facts alleged are all parts of one continuing act creating a single cause of action they may be united. People v. Tweed, 63 N. Y., 194 ; Lattin v. McCarty, 41 id., 107; Rich v. N. Y. C. & H. R. R. R. Co, 87 id., 382.

In Lattin v. McCarty, the subject was fully considered and the rule proclaimed that the joinder of several causes of action is expressly authorized, whether legal or equitable or both, where they arise in the same transaction or transactions connected with the same subject matter. And the right of the plaintiff to join causes •of action such as stated in this case seems to have been determined in a kindred case by this court in Turner v. Conant, 10 N. Y. Civ. Pro., 192.

These observations are indulged in to express briefly the conviction that the complaint is not assailable for its combination of the allegations affecting the different defendants in the relations •they bore to each other and to the plaintiffs.

It is contended, however, that Jerome L. Hill, who pledged the bonds, should have been made a party to this action, and this rests upon the proposition that, by the pledge of the bonds, the title remained in the pledgor until it was divested by a sale upon notice or by judicial pro'cess, and that a complete determination of the action could not be had in his absence.

We have already seen that the transfer made herein vested the title to the bonds in question in the plaintiffs. But that circumstance did not deprive Hill of the right to redeem the bonds by the payment of the indebtedness secured by them, and he has a residuary interest in the balance remaining after the payment of the lien upon them. It is not understood, therefore, how the plaintiffs can be declared to be the owners of the bonds in this action without his presence, or some effort to bring him into court.

The answer to this objection is not satisfactory. It is that the title derived from Hill, as pledgor, did not require his presence aa

p. 721
defendant because, the bonds being coupon bonds and payable to bearer, the title was vested by delivery to the plaintiff, and having the title as against these defendants, they are entitled to sue as owners. And the further proposition that if the plaintiffs were liable to account to Hill, they are trustees of an express trust, holding the title with such liability, and can sue without joining him. The particular reference as to these propositions was made to Sheridan v. Mayor. 68 N. Y., 30 , and Wetmore v. Hegeman, 88 id., 69 , and to other cases establishing the right of the pledgee to enforce the subject of the pledge. These cases, although they bear upon the question of the right secured by the pledgee, did not determine the point involved; indeed, had no reference to it. The learned counsel for the plaintiff, therefore, by inference, assumes that it is not necessary to make Hill a party to this action.

It is true that Hill does not appear to have participated in the interference with the plaintiff’s rights, and for that reason in regard to that branch of the controversy was not a necessary party. And if the object of the plaintiffs was simply to prevent such interference, the action could proceed without the appearance of Hill.

But the relief demanded extends beyond this, the plaintiffs asking that they may be declared to be the owners of the bonds, and as to this Hill seems to be a necessary party. There are no allegations which deprive him of his rights as a pledgor of the bonds. His alleged insolvency could have no such effect. There is, therefore, no legal reason assigned or apparent why he should not be made a party. Markham v. Jaudon, 41 N. Y., 235 .

And again, there is a demand for damages against the defendants Lottimer and Bloodgood, not only for their own acts individually in reference to the cause of action, but their misconduct as executors, a combination which it is very clear is not authorized by any form of pleading accepted in this state. It would necessarily involve punishment for acts done in both their individual and representative capacity, although the rules by which their responsibility would be determined are different This practice cannot be approved in the due and orderly administration of justice, and must be disfavored here as impracticable.

The judgment must be reversed and a new trial ordered, with costs to appellants to abide the event, and with liberty to the plaintiff to amend his complaint upon payment of costs.

Yak Brukt, P. J., and Bartlett, J., concur.